Tag Archives: beneficiaries

Divorce and Your Other Benefits

We’ve written here before about how divorce affects your NYSLRS pension, what a DRO is and why it’s required. However, NYSLRS members have other benefits besides their pensions. Divorce and DROs may affect some of them as well.

Ordinary Death Benefit

As with your pension, a DRO may direct you to designate your ex-spouse as a beneficiary for some portion of your ordinary death benefit. You should file the DRO with NYSLRS as soon as it’s officially accepted by the court.  We will prepare a custom beneficiary form that complies with the DRO.  Also be sure to choose additional beneficiaries for any remainder of the benefit and submit your changes to NYSLRS.

Post-Retirement Ordinary Death Benefit

Most Tier 2, 3, 4 or 5 members of the Employees Retirement System (ERS) are covered by a post-retirement ordinary death benefit. A DRO may direct you to designate your ex-spouse as a beneficiary for some portion of the benefit. Similarly, you should file the DRO with NYSLRS as soon as it’s officially accepted by the court, and be sure to contact us to choose additional beneficiaries as allowed by the DRO.

Loans

NYSLRS members who meet eligibility requirements can borrow a certain percentage of their contribution balance. DROs may be written to prohibit members from taking future loans.

Outstanding loan balances at retirement permanently reduce retirees’ pension benefits. As a result, unless a DRO specifically provides that the ex-spouse’s share of the pension be calculated without reference to outstanding loans, the ex-spouse’s portion will also be reduced if a NYSLRS loan is not paid off before retirement.

Refunds

Occasionally, NYSLRS may refund a member’s contributions because of a tier reinstatement, membership withdrawal, membership transfer or excess contributions. If the member is divorced and NYSLRS has a DRO on file, the DRO will determine whether a portion of the refund must go to the ex-spouse. Generally, if the DRO doesn’t mention a contributions refund, the member receives the full amount.

NOTE: A divorce, annulment or judicial separation revokes a member’s prior designation of a former spouse as beneficiary of certain death benefits and retirement options, except as provided by the express terms of the judgment or decree, or a DRO. So, if you have gone through a divorce, annulment or judicial separation and you do NOT have a DRO, and you wish to retain your former spouse as a beneficiary, you must resubmit your beneficiary designation to NYSLRS. The easiest way to do this is by using Retirement Online, our secure, self-service web application. You can also submit a Designation of Beneficiary form.

Designating Beneficiaries: An Important Decision

When you join NYSLRS, we ask you to designate one or more beneficiaries who may receive certain benefits if you die while working. But, don’t forget about your beneficiaries after you turn in your membership application. It’s important to review them periodically to make sure they reflect your current wishes.

Your beneficiaries can be anyone; you don’t need to choose family members. You can even name an organization, such as a charity or religious institution, or your estate. And, did you know there are two types of beneficiary that you can designate?

Types of Beneficiaries

You can name both primary and contingent beneficiaries:

  • Your primary beneficiary will receive any payable benefit. You can list more than one primary beneficiary, and if you do, they will share the benefit equally. You can also choose different percentages for each beneficiary, as long as they total 100 percent. (Example: John Doe, 50 percent; Jane Doe, 25 percent; and Mary Doe, 25 percent.)
  • Your contingent beneficiary will only receive the benefit if all your primary beneficiaries die before you do. Multiple contingent beneficiaries will share the benefit equally, unless you choose to divide the benefit among them differently.

How Do I Designate a Beneficiary?

Even though you designated a beneficiary when you first joined NYSLRS, you can update your beneficiaries any time.

  • The fastest way to view or update your beneficiaries is through Retirement Online. It’s a convenient and secure way to review your personal details, contact information and more. Register and sign in, then click Manage My Beneficiaries on the right, under I want to ….
  • You can also complete and mail us a Designation of Beneficiary form (RS5127). Be sure to sign and date the form, and have your signature notarized. The notary must include his or her notary expiration date, and your notary should not be one of your beneficiaries. We can’t accept a form with any alterations, including erasures or the use of correction fluid. You can name up to four primary and four contingent beneficiaries on the form. Please contact us if you want to designate more, because we cannot accept attachments.

Whether you change your beneficiaries online or by mail, be sure to include all of your beneficiaries. Your new beneficiary designations will replace all of your previously named beneficiaries. The changes will not take effect until we review and approve your designations.

More Information

You can read more about beneficiary designations in our Life Changes: Why Should I Designate a Beneficiary? publication. If you have any other questions, please contact us.

The Economic Power of NYSLRS Retirees

Before they leave the workforce, NYSLRS retirees build careers based — at least in part — on serving the people of New York. They are police officers, firefighters and nurses. They are the countless civil servants working each day to keep government services functioning. Their contributions don’t end with retirement. In fact, NYSLRS retirees and their pensions contribute significantly to the communities where they live.

Seventy-eight percent of NYSLRS retirees and their beneficiaries (355,028 as of March 2017) stay right here in New York. They live throughout the state — from Long Island to the North Country, from the Capital District to Western New York and down to the Southern Tier. Altogether, they’re 1.8 percent of our state’s population, but in some areas, they account for more than 5 percent of the residents.

NYSRLS Retirees contribute a lot of money to New York State

Retirees’ contribute in New York State

This large population with steady sources of income has a significant and positive impact on our state and local economies. In 2016 alone, NYSLRS retirees were responsible for $11.8 billion in economic activity in New York State:

  • Property taxes. In 2016, retirees paid $1.7 billion in real property taxes. That’s 3.2 percent of the total collected for the entire state.
  • State and local sales taxes. NYSLRS retirees paid an estimated $618 million in state and local sales tax in 2016.
  • Job creators. Some retirees do go on to start small businesses as a second act. However, all NYSLRS retirees spend at least some of their income to the benefit of local businesses, and they are responsible for an estimated 72,370 jobs as a result.

Remember: 75 percent of the pension benefits that make all of this possible comes from the investment earnings of the Common Retirement Fund (CRF), not from taxpayers.

Retirees’ contribute nationwide

Are these statistics impressive? Yes. Surprising? They shouldn’t be. According to research from the National Institute on Retirement Security (NIRS), defined benefit pensions, like those provided by NYSLRS, are responsible for substantial economic gains throughout the U.S. — an incredible $1.2 trillion in total economic output nationwide.

Pensions give retirees a stable source of income, and, in return, retirees support our national and local economies with jobs, incomes, and tax revenue.

Where in New York are NYSLRS Retirees?

NYSLRS retirees tend to stay in New York, where their pensions are exempt from State and local income taxes. In fact, 78 percent of NYSLRS 452,455 retirees and beneficiaries lived in the State as of March 31, 2017. And half of them lived in just ten of New York’s 62 counties.

So where in New York do these retirees call home? Well, there are a lot of NYSLRS retirees and beneficiaries on Long Island. Suffolk and Nassau counties are home to more than 57,000 recipients of NYSLRS retirement benefits, with annual pension payments exceeding $1.8 billion. But that shouldn’t be surprising. Suffolk and Nassau counties are, respectively, the largest and third largest counties in the State outside of New York City.Erie County, which includes Buffalo, ranks No. 2 in the number of NYSLRS retirees, with nearly 30,000. Albany County, home to the State Capital, ranks fourth with more than 18,000. Monroe, Westchester, Onondaga, Saratoga, Dutchess and Orange counties round out the Top Ten.

This distribution is easy to understand. The Top Ten counties for retirees include nine of the ten most populous New York counties outside of New York City. (The City, which has its own retirement system for municipal employees, police and firefighters, has about 22,000 NYSLRS retirees and beneficiaries living in its five counties.)

All told, NYSLRS retirees received $5 billion in retirement benefits in the Top Ten counties, and $9.1 billion statewide.

Hamilton County had the fewest NYSLRS benefit recipients. But in this sparsely populated county in the heart of the Adirondacks, those 435 retirees represent nearly 10 percent of the county population. $8.6 million in retirement benefits were paid to NYSLRS retirees in Hamilton County during fiscal year 2016-2017.

Outside of New York, Florida remained the top choice for NYSLRS retirees, with more than 36,000 benefit recipients. North Carolina (8,693), New Jersey (7,466) and South Carolina (5,620) were also popular. There were 690 NYSLRS recipients living outside the United States as of March 31, 2017.

After You Retire

We’ve written a lot about preparing for retirement — how you should purchase any credit for past service, get a pension estimate, prepare a retirement budget, and more. But, what about after you retire? “So long, NYSLRS! Just keep the monthly payments coming.” Is that it?

Not exactly.

Sign Up for Retirement Online

We recently launched the new Retirement Online, a secure site that allows you to check important NYSLRS information, like the deductions from your latest payment and a summary of your benefits. You can also view or update beneficiaries and generate income verification letters right from your computer.

To access Retirement Online, visit the NYSLRS home page, then click “Register” or “Sign In.”

If You Move, Let Us Know

The United States Postal Service usually won’t forward pension checks to another address. (You may want to sign up for our direct deposit program.) But, pension payments aside, there are other things you’ll want from us once you retire. If we have your correct address on file, you’ll be sure to receive:

  • Your 1099-R form. Your pension isn’t taxed by New York State, but it is subject to federal income tax.
  • Your Retiree Annual Statement. It’s a helpful reference that spells out the benefits, credits and deductions you receive each year.
  • Any official notifications.
  • Your Retiree Notes

The fastest way to update your address is through Retirement Online. You can also mail a signed letter (with your name, old address, new address, date of change and retirement registration number) to:

NYSLRS
Attn: Pension Services
110 State Street
Albany, NY 12244-0001

Keep Your Beneficiaries Current

Reviewing your beneficiary designations periodically is important. By keeping them up to date, you ensure that any post-retirement death benefit will be distributed to your loved ones according to your wishes. You can use Retirement Online to change your death benefit beneficiaries at any time. Or, contact our Call Center, and we will send you the necessary form. If you aren’t retired yet, submit a Designation of Beneficiary form (RS5127).

Keep Your Loved Ones Informed

Your family or friends have to know to notify us when you die, so we can pay out any benefits to your designated beneficiaries. They can phone our Call Center or notify us by mail. Either way, we will also need a certified copy of your death certificate. You and your loved ones can find more information in our Getting Your Affairs in Order and a Guide for Survivors (VO1874) publication.

Life Changes: A Guide for Retirees (VO1705)

Check out this publication for information about other benefits you may be entitled to and the services we offer retirees.

Choosing Your Pension Payment Option

When you retire from NYSLRS, you’ll need to decide how you want to receive your pension benefit.

You’ll have several options. All of them provide a monthly benefit for life. Some also provide a limited benefit for one or more beneficiaries after you die. Others let you pass on a monthly lifetime pension to a single beneficiary. Each option pays a different amount, depending on your age at retirement, your beneficiary’s age and other factors.

Pension Payment Option

That’s a lot to think about, so let’s make this clearer with an example. Meet Jane. Jane plans to retire at age 60, and she has a husband, a granddaughter and a grandson who are financially dependent on her. First, Jane needs to decide whether she wants to leave a benefit to someone after she dies. She does.

That eliminates the Single-Life Allowance option. While it pays the highest monthly benefit, all payments stop when you die.

Jane considers naming her grandchildren as beneficiaries to help pay for their college education.

The Five Year Certain and Ten Year Certain options don’t reduce her pension much, and they allow her to name more than one beneficiary. If Jane dies within five or ten years of retirement, her grandkids would split her normal benefit amount for the rest of that period.

However, the Five and Ten Year options wouldn’t be lifetime benefits. Since her husband doesn’t have his own pension, she’ll leave him her pension and look into a tax-deferred college savings plan for her grandkids instead.

There are a few options that leave a lifetime benefit:

The Joint Allowance — Full and Joint Allowance — Half options continue paying all or half of the retiree’s normal benefit amount to the beneficiary for life.

The Pop-Up/Joint Allowance — Full and Pop-Up/Joint Allowance — Half options also continue the retiree’s normal benefit. They reduce the pension a little more, but they have an advantage: If a retiree outlives his or her beneficiary, the retiree’s monthly payment will “pop up” to the maximum payable under the Single-Life Allowance option.

As you plan for your own retirement, you may also want to consider questions, like:

  • Do you qualify for a death benefit?
  • Do you have life insurance?
  • Do you have a mortgage or unpaid loans that will have to be paid if you die?

These and other factors can significantly impact your retirement planning.

To find out more about pension payment options, check your retirement plan booklet on our Publications page. You can also try our Benefit Calculator, which allows most members to estimate their benefits under the different payment options. For tips on developing a financial strategy that works for you, take a look through Straight Talk about Financial Planning for Your Retirement.

NYSLRS Basics: Special Beneficiary Designations

As a NYSLRS member, it’s important for you to name a beneficiary. Upon your death, your beneficiaries may be eligible to receive a death benefit. You may designate any person, a trust or organization to receive your ordinary death benefit – it does not have to be a family member.

The two main types of beneficiaries are primary (an individual or individuals who receive your benefit if you pass) and contingent (an individual or individuals who receive your benefit if your primary beneficiaries predecease you.)

Primary and Contingent Beneficiaries

A primary beneficiary is the person who receives your death benefit. If you name more than one primary beneficiary, each will share the benefit equally, unless you indicate specific percentages totaling 100 percent are to be paid (e.g., John Doe, 50 percent, Jane Doe, 25 percent, and Mary Doe, 25 percent).

A contingent beneficiary will receive your death benefit only if all the primary beneficiaries die before you. Multiple contingent beneficiaries will share the benefit equally, unless you indicate specific percentages are to be paid.

Special Beneficiary Designations

Special Beneficiary Designations

There are special rules for certain beneficiary designations:

Minor Children

If your beneficiary is under age 18 at the time of your death, your benefit will be paid to the child’s court-appointed guardian. You may also choose a custodian to receive the benefit on the child’s behalf under the Uniform Transfers to Minors Act (UTMA). Before making this type of designation, please contact us for more information.

Trust

If you have executed a trust agreement or provided for a trust in your will, your trust can be your primary or contingent beneficiary. Use our Trust with Contingent Beneficiaries form (RS5127-T) and be sure to include the trustee’s address.

With this type of designation, the trust is the beneficiary, not the individuals who will receive the trust. If you revoke the trust or it expires, its designation as beneficiary is no longer valid. You would then need to complete a new Designation of Beneficiary form (RS5127) to keep your beneficiary designation current.

You should contact your attorney for more information on trust agreements.

Estate

You may name your estate as the primary or contingent beneficiary of your death benefit. If you name your estate as your primary beneficiary, you cannot name a contingent. If a benefit is payable, it will be given to the executor of your estate to be distributed according to the terms of your will.

Entities

You may name any charitable, civic, religious, educational or health-related organization as your beneficiary. An entity can be a primary or contingent beneficiary.

You can find your NYSLRS beneficiaries listed in your Member Annual Statement, which is sent out every summer. Starting in January, you’ll be able to view and update your beneficiaries using our secure self-service portal, Retirement Online. Watch for more information about opening your new online account in upcoming blog topics and in other NYSLRS communications.

NYSLRS’ Top Five Retirement Myths from 2015

Retirement Myths vs FactsFrom the day you become a NYSLRS member to the day you retire, you’re exposed to all sorts of retirement information. Unfortunately, sometimes what you learn can get jumbled along the way. We want to help clear up some common misconceptions we’ve heard from members and retirees over the past year. Here are the top five retirement myths from 2015:


Myth #1 “I’ll receive the full amount of my monthly retirement benefit when my payments start.”

Fact For the first few months of retirement, most NYSLRS retirees will receive partial payments while we finish calculating their final benefit. (We need to collect information on final payments and pensionable leave credits from their employers, a process that can take some time.) The partial payments are based on their most recent NYSLRS retirement estimate and usually make up 90 – 95 percent of their final benefit. Partial payments are paid by check and mailed to the address we have on file for the retiree.


Myth #2 “Family members always receive death benefits.”

Fact With the exception of accidental death benefits, NYSLRS members may name any person, trust, or organization as their beneficiary to receive death benefits. It doesn’t have to be a family member. Accidental death benefit recipients are outlined in the law.


Myth #3 “I can’t collect my pension until I start receiving Social Security.”

Fact Members can apply for retirement as soon as they meet the eligibility requirements of their retirement plan.


Myth #4 “NYSLRS manages my retiree health insurance.”

Fact NYSLRS does not administer health insurance programs for its retirees. We deduct premiums from a retiree’s monthly retirement benefit to pay for their health insurance if we’re told to do so by their former employer.

(If you have questions about your health insurance coverage or premium deductions, please contact your former employer. If you retired from a New York State agency, you can contact the New York State Department of Civil Service.)


Myth #5 “NYSLRS decides when there’s a retirement incentive.”

Fact This isn’t the case. The New York State Legislature (not NYSLRS) enacts retirement incentive programs. Incentives are approved by both houses and signed into law by the Governor. NYSLRS administers programs that are signed into law.


Check out your plan publication to learn more about your benefits. You can also visit our website for more information.

Reporting a Member’s or Retiree’s Death to NYSLRS

When a NYSLRS member dies, whether before or after retirement, it’s important that survivors report a member’s or retiree’s death to NYSLRS as soon as possible.

But long before that happens, you should talk to your loved ones and provide them with the information they’ll need when the time comes. Let them know your wishes, where to find important papers and what steps they need to take. And if your documents are organized and accessible, it will make things that much easier.

Our publication, Getting Your Affairs in Order and A Guide for Survivors, provides step-by-step guidance about what should be done now and after a member’s or retiree’s death.

Survivors can report a death by email, phone or mail. They will need to send us an original certified copy of the member’s death certificate regardless of how they notify us.

How Survivors Can Report a Death

To report a death by phone, survivors can call toll-free at 1-866-805-0990 (518-474-7736 in the Albany, New York area). Once they reach the call menu, they should press “2” to report the death and then press “1.” Their call will be transferred to a customer service representative, who will ask for:

  • The deceased member’s retirement, registration or Social Security number.
  • The date of death.

Please note: Our customer service representatives cannot release the identities of a member’s or retiree’s beneficiaries over the phone.

Survivors can also use our secure email form to report a member’s death. They should enter:

  • The deceased member’s NYSLRS information into the required fields. (If they don’t know the retirement or registration number, we will accept a Social Security number.)
  • The deceased member’s date of death in the Comment field of the form.
  • Their own address and daytime phone number in the Comment section in case we need to reach them for more information.

To report a death by mail, survivors should send us a completed Notification of Death (RS6082) form.

What Happens Next

Once we receive the death certificate, we will send beneficiaries or their certified representatives (guardians, powers of attorney, executors) information about death benefits and, if applicable, information about continuing monthly retirement benefits. We will also send them forms to complete. Beneficiaries should be aware that it could take three months from the date we are notified of the death before any death benefit is paid or any monthly benefit payment begins.

If a member is retired when he or she dies, we will stop payment of any outgoing pension benefits. Survivors should be aware that any uncashed pension checks in a deceased retiree’s name must be returned to us. We will automatically reclaim any direct deposit payments that went out after a member’s death.

Your Member Annual Statement is Coming

We’ve started distributing the 2017 Member Annual Statements (MAS) to more than 600,000 NYSLRS members. The mailing is done in stages, taking six to eight weeks to complete. School employees receive their statements first; most others should expect to see theirs by mid-July.

Your statement contains important information about your NYSLRS membership, including your reported salary, service credit and beneficiaries. Depending upon your own circumstances, you may also see projected annual benefits, loan balances or past service account balances.

When You Receive Your Statement

Be sure to review the information in your statement carefully. If you need to change your address, email or phone number, or update your beneficiaries, you can use Retirement Online — our convenient and secure self-service tool. You can contact us to correct most errors, but if you have a question about your reported salary, please contact your employer.

Because the information is valuable year round, after you check it over, file your MAS away securely. It’s very likely you’ll reference it again at some point in the future.

Member ID Cards

Your statement also includes a member identification card, with both a registration number and a NYSLRS ID number. The NYSLRS ID is new this year, part of our upgrade to a new computer system. When the upgrade is complete, we will phase out the old registration numbers and replace them with the NYSLRS ID.

As identity theft becomes more and more prevalent, please help us protect you and your personal information. Reference either your registration or NYSLRS ID number — not your Social Security number — whenever you contact us.

When you receive your statement, be sure to clip out your ID card. Save it in a secure and easily accessible place, so you’ll always have your NYSLRS identification numbers handy.

Questions about Your MAS?

2017 Member Annual Statement TutorialCheck out our interactive, online presentation. It features a page-by-page explanation of your MAS as well as answers to common questions. View the entire presentation, or go directly to the information you need.

We can provide MAS reprints once we finish mailing statements — usually by mid-July. You can contact us at that time if you need to order a reprint.